Due to term limits, sixty percent of the current membership of the Louisiana Legislature will be barred from re-election in the next four years. By the 2019 elections, there will be forty-seven term limited representatives from the House and nineteen from the upper chamber for a total of sixty-six ineligible candidates, according to Jeremy Alford at LaPolitics Weekly, and on October 24, 2015, Louisiana will elect a new Governor.
In light of this potential political upheaval in the coming years and the impending gubernatorial election, Louisiana Comp Blog reached out to local workers’ comp industry leaders to ask them about their hot button issues: what do potential Louisiana politicians up for election and re-election need to know about workers’ comp right now?
Defense attorneys weigh in
Wayne Fontana, an attorney with Roedel Parsons in New Orleans, believes that worker’s comp should be at the top of the list for “business oriented” candidates. “Comp reform should get the attention of any serious gubernatorial candidate,” said Fontana. “We simply do not compare well with our neighboring states and when an employer has the option to invest in infrastructure…Louisiana is at a disadvantage.”
Stephen Brooks, a defense attorney with Pugh Accardo, echoes the importance of a “business first” mindset. “The ideal candidate would be a business owner who has had to address the issue of workers’ comp coverage for his or her employees and has an understanding of the value of the system and also how premiums affect bottom lines in a major way,” Brooks said. “Oftentimes we have politicians that make decisions based on very little personal knowledge or incorrect information,” he added.
According to Fontana, the potential disadvantages of Louisiana’s system could be remedied for business owners in a number of ways. He offers two specific reform areas aside from a “clean-up” of outpatient billing: lowering pharmaceutical costs and creating physician networks.
Regarding pharmaceutical costs, Fontana cites one factor that receives much national play, but is also a local concern: physician dispensing. Although a recent WCRI study found that physicians who choose to dispense their own repackaged medications at a premium find ways to work around laws, Fontana would still like to see the state get tougher on reimbursement and underscore employer choice of pharmacy in workers’ comp to help curb the pricing abuse. Outpatient billing needs similar guidance in his view to control “runaway charges.”
Fontana’s other proposed area of reform, physician networks, causes much strife in the often adversarial workers’ comp world, but he maintains that the idea could provide major benefits for both sides. “In over thirty-five states, there is some employer choice of physician,” he said. “In Louisiana, because of employee choice…some injured workers get channeled to particular doctors that tend to overtreat, that’s really attorney choice of physician. If there was a network where employees have choice within the network, that would keep the doctors who color outside the lines at bay.”
Overall, Fontana voiced his desire for Louisiana to think long-term economics and workers’ comp’s role within that structure. “[Workers’ comp] should be higher on the list of general Louisiana voter concerns and Louisiana candidate concerns,” he said. “The ripple effect is there even despite the front end of an economic boom that we’re currently experiencing…The last thing you want to do is derail those opportunities with a bad comp system.”
Employers and carriers urge balance
On the employer/carrier side of the question and as CEO of one of the largest workers’ comp carriers in the state, LUBA Workers’ Comp, David Bondy has a unique perspective on what works and what doesn’t when reforms are put into practice. He believes that the most important thing is defending what the employer/carrier community already has, not adding more reforms to the pile that might not be successful.
“Some would say Louisiana’s cost of workers’ compensation compared to its neighbors is evidence of a crisis and that Louisiana needs a major overhaul of its workers’ compensation system,” Bondy said. “This type of sweeping workers’ comp reform has been attempted twice since 2008 and failed on both occasions.”
Bondy emphasized that these past failures have little to do with political party. “Despite Republicans occupying all statewide offices and making up the majority in both houses of the legislature, Louisiana remains a more litigious state than its neighbors. That’s why auto insurance in Louisiana remains among the most expensive in the country and numerous attempts at lowering Louisiana’s jury trial threshold and removing Louisiana’s direct action statute have been unsuccessful to date.”
Bondy noted that reform likely was needed, citing pre-2008 WCRI data which placed Louisiana at number two for cost per claim, medical costs per claim and duration of treatment, and number one among the study states for average length of temporary total disability and defense attorney payments. However, statistics only count for so much in his general view of the health of the system.
“The workers’ compensation system is intended as a trade-off between those paying benefits (employers) and those receiving benefits (injured employees),” Bondy stated. “The no-fault system protects employers from tort liability and benefits employees injured on the job by allowing for prompt quality medical treatment and a reasonable level of income during their recovery. We’ve found that workers’ comp reforms are most effective when focused on keeping that balance in the system.”
As of now, Bondy supports the defense and maintenance of two major reforms that he sees as addressing the state’s most significant employer/carrier cost drivers: the evidence-based medical treatment guidelines implemented in 2011 and the “safe harbor” provision of 2013.
However, he also offers three areas of reform for Louisiana politicians to consider:
First, like Fontana, the medical fee schedule is a target for Bondy. “The inadequate reimbursement for hospital inpatient treatment, combined with the ability of outpatient facilities to seek ninety percent of billed charges has resulted in an unusually high percentage of outpatient procedures in our comp system and medical costs that are unstable and unpredictable due to the considerable amount of litigation over the reasonableness of the outpatient billing.”
Second, Bondy seeks a pharmacy formulary like our Texas neighbors’ system. “We need to promote legislation protecting against the harmful impact that long term use and abuse of narcotics has had on workers’ compensation patients and protect payors from recent abusive pharmacy billing practices like compounding, re-packaging, and excessive drug testing,” Bondy said.
Finally, the LUBA leader would like to see a statute of limitations on medical billing. “Without a reasonable time limit during which a medical provider can seek reimbursement in the workers’ compensation system, payers have become targets for trial attorneys looking for their next big payday,” he said. Bondy cites the PPO class action litigation that “terrorized our industry” as an example.
Troy Prevot rejects “overhaul” of the system
Similar to Bondy and also on the employer/carrier side of the question, Troy Prevot, Administrator of LCTA, finds the current reforms to be worth maintaining and protecting, and rejects the notion that an “overhaul” is needed within the system. However, Prevot also cites the same lack of predictability, especially in outpatient billing, as a major issue.
“We need more accurate predictability for outpatient charges,” he said. “We’re seeing anywhere from 500 to 1200 percent of Medicare reimbursement. But that goes both ways, there needs to be an improvement on the provider side for inpatient reimbursement, and for the employer side, an improvement on outpatient billing.”
Prevot also stands with Bondy on the second aspect of much-needed predictability, a specific timeline for billing. “The billing statute could be a lot of things because right now there is no real timeline for providers to send the bills to us,” Prevot said. “The courts have been inconsistent in applying a standard [for providers]…whereas employers have a set sixty days to reimburse for a paper bill and thirty days for an electronic bill.” According to Prevot, legislators should address this disparity sooner rather than later. “I think a year at most to send us the bill, preferably earlier of course…it’s just not an efficient way to do business right now,” he opined.
Speaking from his expertise as a licensed Physician’s Assistant for over twenty-five years, Prevot identifies opioid abuse as a problem that still needs a solution on the local level. “The federal government is doing some things that are helping by moving opioids to Schedule II, but there’s much more work to be done,” he said.
Further, Prevot is the first to admit that carriers and employers need to make it their duty to adequately address chronic pain if they refuse to approve opioid prescriptions. “We need to recognize alternatives to narcotics and reimburse for that,” he said. “Things like cognitive behavioral therapy and acupuncture…we’re too quick to go from NSAIDs to opioids and we’ve been ignoring black box warnings.” He also notes that creating a method for the state to assess the effectiveness of the medical treatment guidelines in this regard and others is pivotal for both sides of the workers’ comp arena, especially because, “we still have judges making medical decisions from the bench that might not be in the best interest of the patient.”
Prevot’s larger solution is a popular refrain: the need for a drug formulary. “I have never seen addiction like I have with prescription painkillers. We desperately need a drug formulary for this in order to give providers some guidance with evidence-based medicine and to provide more substance to drug screening and address how it is being performed. Of course with both this and the fee schedule it needs to be put in the context of state budgetary concerns.” He added, “A prescription monitoring program and incentives to use it would also help curb abuse. Those few bad actors that are issuing tons of prescriptions and prescribing irresponsibly need to be prosecuted.”
Role of the Workers’ Compensation Advisory Council
Ultimately, Prevot sees the need to honestly address the “defensive posture” or adversarial tone surrounding discussions about Louisiana’s workers’ comp system. Prevot explained, “Since Chris Broadwater brought the [Governor’s Workers’ Compensation] Advisory Council back, we see a much greater ability to solve problems, but we are no where near where we need to be.”
Prevot continued, “In Jindal’s first administration there was an agreement that legislation would be brought to the Advisory Council before being filed and we’ve made some changes in the regs to address some of those potential bills. It’s working, but it is not working as well as it could. I just hope that the next administration will provide the support that the council needs.”